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The Token System: Labour Acquisition and Control on the Natal Collieries, 1911-1956

Literature › Works

Ruth Edgecombe (1987). The Token System: Labour Acquisition and Control on the Natal Collieries, 1911-1956. University of the Witwatersrand History Workshop, 'The Making of Class' (9-14 February 1987). University of the Witwatersrand History Workshop.
Type conference paper
Scope Economics and economic history of apartheid
Method archival narrative
Period studied 1911–1956
Regions Natal, Northern Natal coalfields (Dundee, Vryheid, Glencoe, Paulpietersburg), Zululand
Themes mining migrant labour, labour markets wages, business and state, origins segregation, demography urbanisation
Citation key edgecombe1987

Argument

Between 1911 and 1939 the Natal coal industry built a settled, family-based collier workforce, against the migrant-labour policy of the gold and Transvaal coal mines and of government. It did so through the 'token system', a form of debt peonage run by concession storekeepers and mine managers, with credit and beer halls tying workers to the mines. The industry's precarious, export-dependent economics and its cost-consciousness explain the system's origin and why government tolerated it. The state moved decisively against stabilised labour only in 1955-56, once the industry's economic position had changed and an ideologically rigid National Party government could act. The argument rests on archival evidence from official inquiries and mine records.

Evidence and method

Archival material from the Native Affairs Department files (Central Archives, Pretoria), Native Economic Commission evidence (1930-32), Native Affairs Commission token system report (1938), the Lugg report (1937), Kaffir Beer Committee report (1938), Dundee Coal Company board minutes, Natal Coal Owners' Society minutes, mine accident reports, court cases (Rex v Shapiro 1934), and newspapers. Includes verbatim testimony from colliers, indunas, inspectors, mine managers and storekeepers.

Place in the debates

Findings

  • Natal coal's labour policy diverged from the Transvaal mines and from government policy by promoting permanent colliers with families. (p. 3)

    This was in direct contradiction to the gold and coal mining industries in the Transvaal, which were almost entirely dependent on migrant labour, and government policy, which favoured migrant labour

  • The token system was the instrument for turning transient recruits into permanent colliers after Indian indenture ended in 1911, and was practised on most mines. (p. 5-6)

  • Mine management helped storekeepers recover debts, getting round the prohibition on wage deductions, and a deputy inspector said that in effect the method did not differ from a stoporder. (p. 9)

    a native faced with mine officials and storekeepers agents in the pay office has little option in the matter and the method of payment does not differ in effect from that of a stoporder.

  • Mine managers saw the system as a means of retaining trained labour and building a settled workforce; by 1938 about 60% of the larger collieries' labour force was permanent. (p. 11)

    By 1938 it was estimated that about 60% of the labour force on the larger Natal collieries consisted of permanent colliers, and the percentage at Hlobane was estimated as high as 75%.

  • Beer halls and credit beer were a central source of indebtedness and were supported by managers as a way of keeping workers on the property over weekends. (p. 16)

    With the token system, however, which denied workers access to ready cash, they tended to stick to the mining property and were usually available for work on the Monday.

  • The 1934 prohibition was defeated in court and a later compromise left the storekeepers an 'enormous concession'; state action against the system was repeatedly delayed. (p. 22)

    As the collier's wages tended to range between two and three pounds for a working ticket, this represented an enormous concession to the storekeepers.

  • The system had generated such aversion in the reserves that chiefs were discouraging people from going to the coal mines. (p. 23)

    only those natives recruited at a distance who have no knowledge of the conditions they will have to contend with can be obtained.

  • The state in 1955-56 restricted housing of black colliers to prevent 'black spots', ending the stabilised-labour policy after the proportion of permanent labourers fell from 60% to 28%. (p. 26)

    the proportion of workers housed in married quarters should not exceed 3% of the total black labour complement, or 100 labourers, whichever was the lower.

  • Government tolerated the coal industry's labour policy earlier because of coal's importance to industrialisation (coking coal for steel), and acted in the 1950s once the industry's markets had shifted to domestic demand. (p. 27-28)

    With the industry achieving a more domestic orientation based on steadier demand, not least with the assistance of its own instruments of ISCOR and ESCOM, the government felt free to intervene in labour matters

Evidence ledger

Sources used

Source Kind Period How used
Native Economic Commission 1930-32 evidence (K26, vols 4 and 9), Central Archives Depot commission or official report 1930-1931 Witness testimony on beer quality, indebtedness and compulsion in the token system, and on labour requirements of the gold mines.
Native Affairs Commission, Report of Investigation into the Token System, 1 June 1938 (NTS 7046, file 63/322) commission or official report 1938 Provides the finding that the token system was a labour retention device, the estimate of permanent colliers, and the recommendation to ban it.
Verbatim notes of Enquiry into the Token System, Dundee, 27-28 January 1938 (NTS 2120, file 227/280) interviews oral history January 1938 Supplies testimony from black colliers, indunas, chiefs and government officials on debt, beer halls and compulsion.
Evidence of Government Officials taken in camera, N.A.C., 27 January 1938 (D.H. Bowden, P.L. Hatting, B. Gildenhuys) interviews oral history 1938 Assistant inspector of mines and labour officials testify on compound manager kickbacks, coercion into token use and enforcement.
Lugg Enquiry and Report on Token System, April 1937 (evidence submitted, Report 15 April 1937) commission or official report 1937 Evidence of mine managers (Ferguson) and Lugg's recommendations to abolish the token system and remove beer licences.
Rex v Shapiro trial documents and evidence, 1934 (Criminal Case No. 1466 of 1934, Dundee) state archives 1934 Evidence on the operation of the token system, Shapiro's testimony on profits and use, and the ruling that the regulations were ultra vires.
Report of the Committee Concerning the Supply of Kaffir Beer on the Natal Coal Mines (Thackwray committee), 27 November 1938 commission or official report 1938 Describes colliery beer halls, alleged adulteration and recommends abolishing licensed concession beer halls.
Native Affairs Department files NTS 2119 and 2120 (file 227/280) correspondence state archives 1928-1941 Internal official correspondence documenting the evolution of the token system and the long official struggle to curb it.
Dundee Coal Co. Ltd. Minutes, Board of Directors (Acc. 1336, Natal Archives) company records or reports 1912-1943 Shows company support for the Mine Stores trading monopoly at Burnside and the 1943 labour recruiting association.
Inspector of Mines for Natal Accident Reports (I.M.N.A.) and Mines Department Accident Reports (M.D.A.) state archives 1939-1949 Accident inquiry testimony linking beer hall drinking to accidents and continued indebtedness after 1939.
Minutes of the Natal Coal Owners' Society (N.C.O.S. vol. 13) and Natal Mine Managers Association minutes employer association records 1955-1956 Source for the decline of permanent labour to 28% in 1956 and the 1955-56 government housing restrictions after Burnside closed.
Annual reports of the Department of Mines official statistical series 1911-1939 Cited for the size of the Natal coal mine labour force (not exceeding 20,000).
Natal Witness (4 August 1936); Sunday Times and The Star (23 December 1934) newspapers periodicals 1934-1936 Editorial opposition to the token system and reports of the Rex v Shapiro trial.
Legislation and regulations: Natal Act 23 of 1908, Native Labour Regulation Act 1911, Liquor Act 30 of 1928, Native Administration Act 1927, Government Notice 1087 of 1934, Native Administration (Amendment) Act 1939 legislation gazette 1908-1939 Establishes the legal framework for wage deductions, beer licences and the attempts to prohibit tokens.
Parliamentary questions (Arthur Marwick) referenced in debates parliamentary debates 1937 Cited as prompting the decision to send Lugg to investigate the token system.
Edgecombe and Guest, 'The Natal Coal Industry in the South African Economy, 1910-1986' (forthcoming) secondary literature compilation 1910-1986 Referenced for the ISCOR/ESCOM contracts and the shift to domestic markets.

Inference

Quantification: Illustrative figures.

Qualitative archival case study of one industry and region, reconstructing the origin, operation and regulation of the token system from official files and witness testimony. Explanation of Natal's divergence from migrant labour policy rests on narrative reasoning about the coal trade's economics and on comparison with the Transvaal gold and coal industries.

Key claims

Claim Basis Strength
Natal coal owners deliberately built a settled, family-based collier workforce, using the token system (a form of debt peonage) to turn transient recruits into permanent colliers, contrary to official migrant labour policy. (p. 6) N.A.C. 1938 report, manager testimony (Campbell, Williamson) and the Dunlop letter, all from NTS files. Partial data
The token system rested on mine management collaboration with concession storekeepers, who got trading monopolies and debt recovery at the pay office; this made storekeeping highly profitable with practically no bad debts. (p. 9) Dundee Coal Co. minutes, Barrett letter, Shapiro's evidence in Rex v Shapiro, and price comparisons from official evidence. Partial data
Roughly 60% of the labour force on the larger collieries (75% at Hlobane) were permanent colliers by 1938, falling to 28% in 1956. (p. 11) Official estimates in the 1937 enquiry record (Annexure D) and a letter in the Natal Coal Owners' Society minutes. Partial data
Colliery beer halls, with credit in tokens, were a major source of perpetual indebtedness and were used by managers as a means of labour control. (p. 16) Kaffir Beer Committee 1938, N.E.C. and N.A.C. evidence, Campbell interview with the Inspector of Native Labour, and accident inquiry testimony. Illustrative or anecdotal
Official efforts to abolish the token system were repeatedly delayed and diluted by lobbying, court rulings and compromise, though it was outlawed in 1939 and beer halls persisted. (p. 22) Chain of Native Affairs Department correspondence, Rex v Shapiro ruling, Lugg, N.A.C. and Thackwray reports, and the Native Administration (Amendment) Act 1939. Partial data
Government tolerated the Natal industry's labour solution because of its importance to coking coal, steel and ESCOM/ISCOR and its precarious export economics, but intervened in 1955-56 when export dependence collapsed and Burnside closed. (p. 27) Natal Coal Owners' Society minutes and inference from the industry's changing market structure; the Edgecombe and Guest forthcoming study is cited. Asserted
Natal's labour policy diverged from that of the Transvaal because of small labour requirements, availability of land (colliery farms, black-owned and mission land), perceived health benefits, and the industry's precarious bunker and export economics. (p. 4) Department of Mines reports, N.E.C. evidence and NTS correspondence, plus reasoning about the coal trade. Illustrative or anecdotal

The author's caveats

Working draft; the author notes that the evidence is largely testimony and acknowledges that official claims and statements by storekeepers and managers conflict (e.g. the 'voluntary' repayment of debt). Compound manager kickbacks are said to be unprovable ('you cannot prove it'), and workforce proportions are described only as 'estimated'.

Gaps in the evidence

The argument relies on official files and statements by interested parties rather than systematic data. Colliery wage books, token issue ledgers, store accounts, and labour turnover and desertion records would test claims about indebtedness, profits and retention. Company and Mine Stores records, which may exist in archives, would allow the proportion of permanent labour, debt levels and wages to be quantified and compared with the Transvaal and the Natal Cambrian (no tokens) colliery.

Replicability: Data described but not public.